The ManicaPost
Kudzanai Gerede Business Correspondent
A fuel-pipeline sharing deal is on the cards between the Governments of Zimbabwe and Botswana that will see the Harare-Beira pipeline extended to Francistown as Harare stretches its hand to more regional partners wanting to access the pipeline which makes it more competitive through increase in traffic volumes, Post Business can reveal.
The Harare-Beira pipeline has a capacity to pump a maximum of 6 million litres of fuel a day to Zimbabwe.
Botswana has already started works on expanding its Francistown storage tanks with capacity to hold up to 60 million litres that will supply the north-eastern parts of the country which borders with Zimbabwe.
Sources say the project negotiations have already taken place and await implementation.
Speaking to Post Business on the side lines of the SADC Petroleum and Gas Sub-Committee Meeting in Harare recently Botswana representative and Chairperson of the sub-committee Mr Baruti Regoeng said Botswana was restructuring its fuel supply model to make it more economical and the Beira-Harare pipeline presents a viable alternative for the supply of Botswana’s north-eastern parts.
He however, declined to divulge the total cost, dates of commencement of the project and other specific details for the time being but confirmed all paperwork is done and all set for implementation.
“We are done with the project details and other relevant specifics between the two parties and we are now at implementation stage, that’s what demands our focus now.
We have already started expanding our Francistown storage facilities to reach a capacity of 60 million litres that will be supplied through Zimbabwe from Beira meant for the north-eastern parts of Botswana. This part of Botswana is closer to Zimbabwe so it can only make sense that we get connected with Harare,” said Mr Regoeng.
Botswana intends to have 35 per cent of 1,2 billion litres it requires a year supplied through the Beira-Harare pipeline, 10 per cent from Namibia’s Walvis Bay facility and the remaining 55 per cent from South Africa.
He said Zimbabwe remains a strategic partner in the future prospects of his country and SADC as it plays a crucial role in connecting and distribution of various other goods and services including electricity at a time of regional integration.
The development comes at a time Government is seized with making the Harare-Beira pipeline more competitive as shown by the recent two cents reduction in the pipeline tariff beginning of January this year from 8,05 cents to 6,50 cents per litre.
This came amid concerns by players in the fuel distribution industry that the pipeline was less economical compared to using trucks which were destroying road infrastructure along Mozambican and Zimbabwean highways.
In order to boost the country’s economies of scale on the Harare-Beira pipeline which will ultimately lower the user cost, Government is thus opening the pipeline to more players, locally and within the region.
“Using the pipeline is all about the game of numbers. If as a country we consume less fuel then the cost of using the pipeline is higher but if volumes using the pipeline are increased which in our case will be by sharing the pipeline with more players then the cost becomes competitive,” said permanent secretary in the Ministry of Energy and Power Development, Mr Partson Mbiriri.
He also said the country needs to take advantage of its geographic centrality in the SADC region, its bulk fuel storage facilities with a capacity in excess of 500 million litres and its pipeline connection with Port of Beira in order to be a fuel trade and transportation hub in the region.
“The Government continues to seek ways of making the pipeline more competitive and attractive.
“The pipeline therefore presents an opportunity that countries in the region may want to take maximum advantage of,’
“The country is willing to work with neighbouring countries to extend the pipeline from Harare to any agreed destination. Botswana has shown some interest in doing so,” said Mr Mbiriri.
The Port of Beira is the country’s lifeline in terms of fuel transportation with over 95 per cent of total fuel destined for Zimbabwe coming through the Port. It also meets the remainder of the fuel supply from South Africa by road.
